Construction is the taxman’s friend again now that the Construction Industry Scheme (CIS) will be put back another year to 2007.

The industry’s Joint Taxation Committee walked out of talks with HM Revenue and Customs in September over the latter’s refusal to put on the brakes, but the revenue’s recent U-turn brought it back into the fold.

The tax scheme was meant to come into force this year, but delays due to problems with the computer system, fears of emergency tax deductions and the lack of available commercial software led to protests from the industry.

The scheme is supposed to reduce the regulatory burden on construction and crack down on bogus self-employment.

Industry has now thrown its weight behind the system and is set to plan a full joint testing programme.

Liz Bridge, head of tax at the Construction Confederation, said the U-turn would solve a lot of problems.

“We now have time to plan for change, time to teach small contractors how to operate the new scheme, and time to work with the Revenue to test the software being developed at their end, and ours to operate the scheme.”

However the Association of Chartered Certified Accountants (ACCA) has warned even with the postponement, many contractors would still not be fully compliant in two years.

Source

Construction Manager